Western Digital Gets Flash for Cash

Today, Western Digital entered the Solid State Disk (SSD) market
through the acquisition of SiliconSystems.Now that the $65 million cash deal is complete, integration into Western
Digital begins immediately. SiliconSystems will now be known as the WD
Solid-State Storage business unit.

SiliconSystems sells its SiliconDrive products to the embedded
systems market for use in servers and storage devices. The drives are also used
in areas such as network-communications, industrial, medical, military, and
aerospace markets. Western Digital is hoping to exploit this product base as
well as SiliconSystems’ cross-licensing agreement with SanDisk.

SiliconSystems accounted for a third of worldwide SSD
revenues in 2008. SiliconSystems' product portfolio includes solid-state drives
with SATA, EIDE, PC Card, USB, and CF interfaces in 2.5-inch, 1.8-inch, CF, and
other form factors. SiliconSystems’ patented and patent-pending technologies
including PowerArmor, SiSMART, SolidStor, and SiSecure help to ensure data
integrity, eliminate unscheduled downtime, protect application data and
software, and provide for data security and protection.

Western Digital has been focused on the SSD market prior to
this acquisition with its own internal team, but as Avi Cohen, an analyst at
Avian Securities, points out, this deal accelerates Western Digital’s time to
market by enabling the company to enter the SSD market immediately.

This is a good time for Western Digital to get its hands on
SSDs, considering more and more storage firms are throwing their weight behind
the technology. SSD offer faster data access speeds than traditional hard disk
drives. The technology has been gaining momentum, thanks in part to companies
such as EMC, Sun Microsystems, and IBM who have pushed the technology.